Lebanese parties voice surprise at FX move, govt seen backtracking
By Timour Azhari and Tom Perry
BEIRUT, Sept 29 (Reuters) - Leading Lebanese politicians said on Thursday they were blindsided by a plan to slash the official exchange rate, with the powerful Hezbollah group demanding a review of the decision and the finance ministry backing away from a Nov. 1 start date.
The ministry said on Wednesday the official exchange rate of 1,507 pounds per dollar would be replaced with one of 15,000, calling this a step towards unifying multiple rates that have emerged during Lebanon's three-year long financial crisis.
But after declaring a Nov. 1 implementation date, the ministry later linked the step to approval of a financial recovery plan, the latest version of which is being discussed in parliament.
Some economists and politicians saw this as a government retreat: the recovery plan, which must address a $72 billion hole in the national finances, has been in dispute since 2019.
The pound's market value currently stands at 38,000 to the dollar, a devaluation of more than 95% since Lebanon collapsed into a financial crisis that has plunged swathes of the population into poverty.
Hassan Fadallah, a senior Hezbollah lawmaker, told Reuters he had heard about the decision in the media.
"This decision was hasty and its results were not clearly studied, therefore we saw an attempt to retreat from it," said Fadlallah, whose heavily armed Shi'ite group has ministers in government. "We call for rescinding this decision."
Finance Minister Youssef Khalil could not be reached for comment. In a Reuters interview on Wednesday, he said the change was agreed with the central bank and would be discussed with stakeholders over the next month before implementation.
Ibrahim Kanaan, a senior lawmaker in President Michel Aoun's Free Patriotic Movement, told Reuters amending the official rate was necessary "but not in this way".
"I want to check if he will follow through on this or has to amend it a bit, because you cant do it this way," he said.
A finance ministry official referred Reuters to a statement late on Wednesday that said the move to a new official exchange rate was "conditioned on the approval of the recovery plan that is being worked on, and which should accompany that step".
Central bank governor Riad Salameh, in a text message to Reuters late on Wedesday, said implementing the decision "will require time", without elaborating.
'IT'S STILL CONFUSED'
Unifying the numerous exchange rates in Lebanon is one of several conditions set by the IMF for a badly needed aid package. The Fund has said this is crucial to boosting economic activity. The IMF said last week progress in implementing reforms remained very slow.
In addition to official and parallel market exchange rates, authorities have created several others during the crisis, including unfavourable rates applied to withdrawals of pounds from hard currency deposits in the frozen banking system.
Nasser Saidi, a former economy minister and central bank vice governor, said the government was backtracking.
"It's still confused. We still don't know exactly what the decision is, and who took it," he told Reuters, adding that exchange rate changes were the central bank's responsibility.
Were the official rate changed to 15,000, this would have big implications for the balance sheets of both the central bank and commercial banks - which both have large negative forex positions, the value of which would be multiplied by 10.
Such a move would also fuel inflation. Withdrawals from hard currency accounts at the 15,000 rate could only be financed by printing more pounds, leading to hyperinflation and a further depreciation of the pound on the free market, Saidi said.
Additional reporting by Laila Bassam; Writing by Tom Perry, Editing by William Maclean
면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.
온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.
이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.